Early retirement scheme criticised

Professor at the Free University of Brussels suggests economy could struggle to recover with lack of workers

A leading Brussels-based think tank has criticised the Irish government's early retirement scheme for public service workers. Bruegel has warned that it is economically damaging to encourage experienced employees out of the workforce and such measures result in a "permanent output loss".

"Any government that introduces an early retirement scheme is taking a very pessimistic view of the future," said Bruno van Pottelsberghe, professor at the Free University of Brussels and author of a policy document on economic recovery produced by Bruegel.

"It is like betting on the past. It may be good in the short term, because it will save money, but what happens when the crisis is over and Ireland returns to economic growth? An economy can only recover if there are people available to work."

An early retirement scheme was announced by Brian Lenihan, the finance minister, in his emergency budget last month as part of the